The strength of the market was on full display this week. The indicators are still in bullish agreement with this move, but there are a couple of potential overbought sell signals setting up. There is support at 2510, 2480, and 2400.

The weighted equity-only put-call ratio remains on a strong buy signal. It is now approaching the lower regions of its chart, so it can be classified as mildly overbought, but it has not reached the June multi-year lows yet. The standard ratio is not as bullish, as it has been moving sideways for nearly two weeks.

Market breadth has been strong, and both of our breadth oscillators remain on buy signals. Volatility indices remain at very low levels, which is another overbought condition. But there is no real worry until these indices begin to rise and trend higher.

In summary, we remain bullish for the intermediate-term, as $SPX continues to make new highs, and the indicators remain bullish. The overbought conditions could produce a sharp, but short-lived correction, but would likely not alter the intermediate-term bullishness.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and publishes several option trading newsletters.